We have long been impressed with Cedar Falls Utilities (CFU) in Iowa. They built an incredibly successful municipal cable network that has now been upgraded to a FTTH network. CFU transfers $1.6 million into the town's general fund every year, reminding us that community owned networks often pay far more in taxes than the national cable and telephone companies.

Last week, Moody's Investor Service gave an investor-grade A-3 rating to revenue debt from CFU, another sign of its strong success.

Moody's rating report noted the utility's large market share, competitive pricing and product offerings, expansive fiber optic network, long-term financial planning and conservative budgeting practices as reasons for the continued strong rating of the utility's revenue debt.

CFU also compiles the community savings resulting from each of its services by comparing its rates to nearby communities (see most recent comparison [pdf]). The benefits total $7.7 million each year, almost $500 per family. This includes a $200 difference in cable TV bills and a $130 difference in Internet service.

Blair Levin is Executive Director of Gig.U. Prior to that, he was in charge of developing the National Broadband Plan and long before that was Chief of Staff for the FCC during the Clinton Presidency. He's had a lot of experience in telecommunications policy but here we focus on what can be done to move America's communities forward.

I asked Blair to join us for the show so I could ask him some hard questions about the Gig.U initiative, including the difficulty of achieving universal service and the tradeoffs around allowing entities not rooted in the community to own (and set the rules for) essential infrastructure. I also challenge Blair's preference for "private sector" investment, asking him what exactly that means.

I hope our discussion is helpful in understanding the tradeoffs communities must make in choosing exactly how to improve Internet access locally. Though Blair and I disagree in some ways, I think we clearly illuminate why we disagree so the listener can make up his/her own mind.

If you have some questions left unanswered or points you wish were made, note them in the comments below and we'll ask him to join us again.

Read the transcript from our discussion here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

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Thanks to D. Charles Speer & the...

New Hamsphire FastRoads is making significant strides in connecting residents, businesses, and community anchor institutions in the southwestern section of the state. FastRoads is funded by a combination of American Recovery and Reinvestment Act (ARRA) grants, private donations, and funds from local communities.

While the network is certainly making progress and scheduled for completion this summer, it has been constrained by state laws that limit the use of bonding. As a result, many local communities that would like to benefit from connections with Fast Roads will not able to take advantage of its presence in this largely rural area of the state.

We recently spoke with Carole Monroe, Executive Director of New Hampshire Fast Roads, in a Broadband Bits podcast interview. She told us about a bill in the New Hampshire General Court this year that would remove restrictions that limit how local governments can finance network investments.

In past years, New Hampshire legislators took up several bills that would remove the restriction preventing local communities from using bonds to finance broadband infrastructure. Every year, lobbyists from large ISPs manage to push those bills into oblivion. This year, HB 286 seeks to strike the restrictive language.

The bill is getting attention from local media, the New Hampshire SentinelSource. An editorial, published soon after the bill was introduced summarizes the problem:

In areas where companies determine that investing in expansion isn’t worthwhile, municipalities often find their hands tied because state law does not allow communities to take out municipal bonds for broadband access if there’s a private company operating in the community. That means if a town has even a small pocket of coverage by a telecommunication company, it can’t get funding to pay for expansion to the rest of its residents and businesses.

The...

Franklin, Kentucky expects to see more positive economic growth when it launches its new fiber optic network. According to an article in the Bowling Green Daily News, the south central community is ready for the upgrade:

“We are super excited about it,” said James McCaslin, associate vice president of academic affairs and director of Franklin-Simpson Center. “It will be like going from 1970 to 2013 with the flip of a switch.”

We contacted Tammie Carey, Fiber Services Manager for Franklin Municipal FiberNET, and she was good enough to answer some questions. She told us that 32 miles of aerial fiber are strung in three loops around the city to ensure redundancy. She expects the network to launch near the end of January for local businesses, though the utility has already been serving one business as detailed below.

The decision was based solely on a desire to boost economic development, a sentiment echoed in the Daily News article:

It’s hard to recruit industry now if you don’t have (fiber optics),” said Dennis Griffin, industrial recruiter for Simpson County. “A lot of industries, particularly in this area, are satellite plants connected to their corporate offices, somewhere else in the United States. They all need to be connected by fiber.

“So if you don’t have that, it’s hard to compete with communities that do,” Griffin said. “Ten years ago, you could get by with T-1 lines – now most industries are just expecting that you have fiber."

Apparently, City officials contacted AT&T and Comcast several years ago and asked them to install fiber to the Franklin industrial parks. When they refused, City Leaders began pondering the possibility of a municipal fiber network. Tammie tells us about the decision in an email:

It was economic based.  Our Industrial Authority was working with several industries regarding possibly locating in our community.  A need they had was large amounts of reliable bandwidth.  The existing companies would not build fiber to the industrial park locations.  The city saw this as a major hindrance with our economic development recruitment and made the decision to invest in a system....